Question

Jones Corp. reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet. The current assets consisted of $62,000 Cash; $43,000 Accounts Receivable; and $88,000 of Inventory. The acid-test (quick) ratio is_____________.

Answer 1

Answer:

Acid-test (quick) ratio=0.76642

Explanation:

Given Data:

Current Assets=$193,000

Current Liabilities=$137,000

Cash=$62,000

Accounts receivable=$43,000

Inventory=$88,000

Required:

Acid-test (quick) ratio=?

Solution:

Quick Assets=Cash+Accounts receivable

Quick Assets=$62,000+$43,000

Quick Assets=$105,000

Acid-test (quick) ratio=Quick Assets/Current Liabilities

Acid-test (quick) ratio=$105,000/$137,000

Acid-test (quick) ratio=0.76642